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Closing Bell With Maria Bartiromo

News/Business. Maria Bartiromo. Analysis of the day's winners and losers in the stock market. New.

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Us 11, U.s. 6, Jamie Dimon 5, Sony 5, America 5, Phil Lebeau 4, Tesla 3, Julia 3, London 3, Citibank 3, Dan 3, Schwab 3, Mandy 3, Ford 2, Playstation 2, Joe 2, John Liu 2, Rick Santelli 2, S&p 2, Peter Sorrentino 2,
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  CNBC    Closing Bell With Maria Bartiromo    News/Business. Maria Bartiromo. Analysis of the  
   day's winners and losers in the stock market. New.  

    February 20, 2013
    4:00 - 5:00pm EST  

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dollar index. the dow near the lows of the session, down 111 points at 13,924. the worst day for a lot of these stocks in a couple of months here, and vix, the volatility index, the fear indicator is having its best day since november of '11. up 18.5% and the volume estimate index at 14.5. matthew cheslock, you've been skeptical of this market anyway. what's this market message today, do you think? what's going on here? >> i take it as a good sign that the fed is talking about preemptive moves. this is a discussion that has to take place. this can't go on forever. this is a good sign. if the market is down 100 and the fed is talking about ending, as you say, the party here, that's a pretty good sign. i'm not worried about that. more concerned about what we're seeing in some of the commodity plays. >> look, when you can't find a fundamental reason for gold and oil and some of the other
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markets to be down like that sharply, then you start having rumors out there which are unsubstantiated. the dollar was very strong today. >> we either best currency out there, so the dollar will rally on that news. gold had good action yesterday. tick below 1,600 and rallied back in the afternoon and the equities followed. i thought it was a pretty good sign today. >> turned out to be a head fake. >> complete head fake. now we'll approach 1,550 in gold, maybe a support level and maybe we get value because there's a lot of value in the gold play. definitely one that's underowned and underappreciated. >> matt cheslock, watching gold. thank you, my friend. down 100 points on the dow today and the nasdaq 47 points. former fed governor will respond to the fed minutes and earnings from tesla in the second hour of the "closing bell." and welcome back to the "closing bell," everybody. boy, what a last hour we've just had. i'm mandy drury sitting in for
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maria bartiromo. bill griff sit coming back in just any moment now. meantime, stocks are sinking after a relatively hawkish fed minutes. that kind of spooked investors, and as you can see we're just settling up now, but it looks like the dow is down by 110 point and the nasdaq off 49, 1.5% less and the s&p 500 down by 1.2%, sitting there at 1511. as you can clearly see in terms of absolute numbers, 14,000 no more. we're now below that mark on the dow. bill? >> so, the question becomes was the day's downturn just a fluke, or is it the beginning of a much anticipated correction? let's ask peter sorrentino from huntington asset advisers, allen gale, michael jones from riverfront investment group and our own rick santelli. everybody is in the water at this point. what do you think? i mean, you know, everybody has been scratching their heads as the market continued higher here, but they were at least willing to stay with the trend
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as long as it was in place. has the trend ended today, do you think? >> well, first of all, i've been modestly overweight equities in my allocation strategies going into the year, and that's because of the fundamental improvement that we saw mentioned in the fed minutes today. but i think clearly the market has gotten off to an exceptional start, and it's probably a little extended in here. so it's not surprising, if you look over the past couple of weeks, the increases have been smaller, so this is a -- this is a market that seems to be running out of wind for the -- for the near term. >> right. >> and, you know, the question is are we going to have a sharp pullback which i don't think is likely. what is more likely in my view that we're going to see this cheap period of consolidation which is going to set up for a better market later in the year. >> rick santelli, i would like to know back on january 2nd, right, the bond market got its feathers ruffled and kind of like a game-changer from the very hawkish december minutes. today seems to be add together hawkish voice. what's going to happen to the
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bond market from here? >> well, tell me if the minutes are representative of enough horse powers on the f1c committee to actually purchase the ship or taper the purchases and every market responded. the battle cry for all our analysts is that in large part what's good for stocks is because of the program of the fed, so it is not surprising that these minutes ufld up the stock market, and in doing so, in the printing press, it ruffled up the currency market. >> right. >> you're having heej selloffs against the greenback as bill pointed out on the dollar index. it's the aussie dollar, the british pound, the euro. they all sold off much more dramatically after the 2:00 eastern minutes. this is a big deal. the word tapers, usually when i go to the barber and i say taper the back and they taper the purchases it's going to open another can of worms. does that mean they have to fluctuate with every data point? they are getting deeper and deeper in this and you get a
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good glimpse what the equity markets can do on their own. >> nice haircut there, too, by the way. peter sorrentino, you have a trading range on the s&p that you could drive a fleet of trucks through. 1577 on the high side and 1377 in the low side. we're comfortably in your range here, aren't we? >> we are, and it's really -- what rick pointed out, a lot of knobs and dials on the market right now. we really repatriated from the is willing last fall. profit margins are maxed out, most of the price two measures, market trading fairly high so we were starting to think we were getting close to our upper end target and started to get defensive on this. when you look at the fact that there wasn't a lot of press given to basically what the irish have done is monetized their debt, we were on the verge of a currency war, so i think, you know, the fed's position is pretty well understood in that context so they can't afford to monetary ease because all the
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guns are drawn and who shoots first in that thing. >> michael, is the economy strong enough, corporations strong enough to stand on their own? fed is not going to pull the plug hon this any time soon, but the noises are out there. it's already spooky the market. once the fed is no longer juicing up this market, is there enough out there that's strong enough to keep it going? >> i really don't think that the fed is going to take any chances with what is so far a very tentative recovery. they know we'll already have quite a bit of fiscal tightening in 2013. we've got the sequestration that's almost certain to take effect, already had some pretty big tax increases. i can't see bernanke and janet yellin taking a risk with a premature taking away of the punch bowl but policy change in the rate overseas. europe and japan are looking much better i think in terms of the change in policy than the u.s., and i think the
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outperformance that we saw in the last part of last year can take hold again this year. >> yeah. allen gale, are you paid to put money to work, got to put some money to work or even if this market is going to see a correction of some kind. where would you be buying right now? >> to kind of echo michael's sentiments. allocation strategies is on the international front so we do like to develop markets. we are adding to the emerging markets as well so we think that at the margin this is a good story. this is a -- you know, as we go through 2013 we think the international space is going to continue to outperform. meantime, i think it is important to see that the fed is committed to this -- to this expansion continuing, particularly in the face of the fiscal tightening that we're likely to see. the fed doesn't really have any choice in their own mind. >> they have to keep reminding us that it's not going to last forever. the conversation has to start at some point. >> that's right. >> and what we're seeing is the conversation today, at what point do we start taking about
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removing that stimulus, that the conversation that's going to go on through the first half of the year. frankly i think it's appropriate given that we're going to be seeing some economic weakness over thener team but as we go into the second half of the year they could do something. >> go ahead. >> i think the big conversation that's going to start is we've now had a small pullback in the equity market that are h no reaction in the bond market and that is a big change where you're seeing a decoupling, and that i think is going to scare some of the -- of the money that's been seeking safety in the bond market back into the equities. >> rick, what's that look on your face for? >> i don't know that i see that decoupling. we've been pretty much starting a camp fire here around 2%, so i don't know that i agree. i think the bond market -- you know, everybody wants it to change, but it certainly doesn't seem like it is in a big way. >> well, let's not forget. the fed has its thumb on the bond market, not on the equity market directly. >> i agree. and when we talk about the
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fiscal tightening. >> you're not likely to see much action there. >> that's $85 billion a year. the fed is spending $85 billion a month. just think about it. >> mind-boggling. >> thank you all. thanks for your thoughts. >> let's get to julia boorstin who has some breaking news for us. julia? >> that's right, bill. the "new york times" company just announced its plans to sell the "boston globe" and all the related news properties that are part of the new england media group. the company has retained evercorp partners to manage the sale but is not commenting on which potential buyers it's talking to or what kind of price it expects to get. this is all part of a plan to focus in on a "new york times" brand itself and on the subscription model which is one of the few things working for the company right now. in the past year or so, the publisher has sold off a number of properties, including one group as well as other regional papers. spoke with the analyst who said they are stripping away everything but the core "new york times" plan could be part of a plan for the "new york
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times" -- the family that controls the "new york times" to take the company private. back over to you. >> thank you very much. much more ahead on this jam-packed edition of the "closing bell." charged up or flat. tesla motors exvogt deliver its quarterly results any moment now and phil lebeau will break them down the moment they are released. >> also, make or break time for sony. the first new video console in 2006 breathe new live into the struggling industry and the gaming industry. >> we'll look at that. and our very own larry kudlow says automatic spending cuts to kick in on march 1st could be really good for the economy. really, larry? we'll hear his thoughts on that. that's when we return here on cnbc, first in business worldwide. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer.
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to deposit checks from anywhere. [ wind howling ] easier than actually going to the bank. mobile check deposit. easier banking. standard at citibank. just a reminder. tesla's earnings will be out momentarily, and when they are we'll go to phil lebeau with that. let me do this like larry kudlow would do. my great friend and colleague lawrence kudlow believes that the spending cuts that are due to kick in on march 1st would be good. that's right, good, for the u.s.
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economy. >> but dan greenhouse, also our good friend but not colleague, chief global strategist at btig and also a cnbc contributor says no way, not in the short term at least. we've got both of them with us. larry, you're sitting next to me so you get the pleasure of going first. you think it's going to be good. why? >> any time you can limit government and reduce spending it's a positive for the private sector and it's a positive for growth. we did it under clinton. we did it under reagan. we did after world war ii. in fact from a new book we did it under calvin coolidge so smaller government means less burden and better private sector but let me just break these numbers. >> hold up for just a second. you know how this works in television. let's get to phil lebeau with the tesla newspaper and come back to the conversation on sequestration. >> a wider than expected loss from tesla in the fourth quarter, loss of 65 cents a share versus the estimates on the street of 55 cents a share. revenue coming in stronger than
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expected, coming in at $306 million. three headlines we want to point out. first of all, the company reconfirming that it expects to produce 20,000 model-s sedans in 2013. that was the target they put out there. they are reconfirming that that will happen this year. second of all, now expect to be profitable in the first quarter of this year as opposed to late this year which was the previous guidance so expect it to be profitable soon, and finally reservations for the mold-s. this is important in terms of that demand that's out there. the increase with 6,000 new ones in the fourth quarter and compare that with an increase of 2,900 in the third quarter. don't forget we'll be speaking with the ceo. later on today we'll have exclusive comments from him starting tomorrow on "squawk box. ". >> the that stock down 4% and trying to come back in the wake of the earnings results. thanks so much, phil lebeau. back to our discussion of the spending cuts due on march 1st. larry, you agree with howard dean here, are you aware that have? >> howard wants to raise taxes but regarding spending i
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absolute agree. all i'm saying in a general sense, show me limited government and a lower spending burden to gdp and i'll show you a healthy economy. what's interesting though, before i get to dan and i know he wants to comment on this, he's a good friend. look, the coughies is not scoring the sequester at 85 billion. i want to make that point. we use that number. it's wrong. sequester is going to be 44 billion. that's the budget outlay for tlooent. it's just half of what people have been talking b.44 billion is one-quarter of 1% of gdp, and it's a percent and a quarter of the budget. in other words, it's miniscule, the 44 billion. we've been led to believe it's 85 billion. not true. not to worry. it's going to be phased in so gradually you won't feel a thing. >> tell that to the defense employees that will be cut. >> they will have a chance to do it here, too. this worst case pessimism, this
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armageddon scenario being conjured up deliberately by the military and many others will not be necessary. the rules will be altered by the way as the year goes on, and it's all a lot of, shall we say, hullabaloo right now. >> if i could just in. >> go for it, dan. >> i don't necessarily think larry is necessarily entirely wrong there. i think the problem right now is whether or not the private sector is capable of picking up where the public sector is going to be cutting back, and if you look at numerous countries around the world, particularly in europe and the uk, it's pretty clear when you reduce government spending, it has in the immediate a detrimental effect on the private sector. again, you need to look no further than q4 gdp in the united states negative largely on the back of federal spending. you can say what you will about the desirability of the cuts, whether they are beneficial to the u.s. economy in the medium or long term, it's hard to argue in the immediate it's not going to be from a gdp standpoint a negative. >> first of all, the private
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sector did very well in the fourth quarter, and you had a very bizarre turnaround in military spending where q3 jumped up high and q4 came down low. again, these numbers are not inconsequentialal numbers. >> i get it on the numbers. i get it on the numbers but like trimming a hedge. you're going straight across. it's not a targeted cut of some kind. it's just across the whole budget here. is that the smart way to do this? >> sometimes you've got to take what you can get. >> thank you, dan. >> that's exactly my point. >> you're supposed to disagree with him. we've been sandbagged here. >> frankly neither democrats nor republicans particularly want to cut spending, let's face it, okay? you've got a situation where they are going to have to do it, and i think any time you can get it as dan greenhaus said, what you want to do here, very simple. reduce the federal spending share of gdp. that's all you want to do, and whether we've done it his toreically, such as let's take the clinton years, a democrat.
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we had an economic boom. reagan slashed domestic spending, had a boom. heck, calvin coolidge slashed the level spending and we had a boom. this time we're not even cutting the level of spending. we're just cutting the increase. >> let me say two things real quick. larry should be written a shock. >> she was on the show last night. >> you know, more importantly, i don't disagree with larry about what he's talking about, but what i do disagree with is how we should sell the cuts, and i don't think we should be running around the country telling people that these cuts aren't going to matter, that they are -- we should be explaining to people that there is a medium to longer term problem here in the united states, and there might have to be some pain so that may mean some defense contracts. >> do you think this is why the stock market? >> government pain. >> notwithstanding the stock market setting these five-year highs, even as we got closer and closer to this -- to the day of the cuts here.
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is the market at least trying to tell us that it won't be as bad as we've been fearing, larry? >> i believe it is. not sure it's had a big impact on the market. the federal reserve has end and the easing in japan has helped and all that good stuff but the quester is not going to be an issue. it's a big nug nothing. it's a political issue and not real an economic issue >> you don't think it's going to rough the markets come march? >> ruffle the market for a day, for an hour, for five minutes. we're due for a correction anyway, even though i'm very, very bullish about the story. the american economy is probably getting strong, not weaker. you saw the single-family housing starts today was very strong. all i'm saying is you show me limited government, i'll show you economic growth. >> that's our boy. there you go. thanks, larry. dan, thanks for your help, i think, even though you agreed with larry more than you disagreed. >> i disagree in tone. i don't disagree in principle. >> very good.
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see you guys later. >> see you tonight, larry. >> 7:00, "the kudlow report." >> wouldn't miss it. >> diamond in the rough, or should we say ceo in the rough. a case for increased oversight at the bank in a short time? >> plus, the u.s. postal service is planning a new clothing line to help it get out of the red. we'll speak to two experts about the challenges that the post office faces and what it needs to do to lick the losing $15 billion next year. that's coming up. [ male announcer ] we began with the rx. ♪ then we turned the page, creating the rx hybrid. ♪ now we've turned the page again with the rx f sport. ♪
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u.s. postal service really trying to revive its business at the first point from cutting back on saturday, first class mail delivery to launching a new clothing line. can't wait for that fashion show, mandy. >> yeah, but how can the usps link it to profitability? great to have you both on the show. we've got two johns here and two john c.s. john callum, will this make any dent in the fiscal problems that the u.s. post office is having? >> well, i think that's really a question for the fashion industry about how much money they can make. >> i guess, yeah.
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>> well, how much traction does this idea get really, do you think, or is it just a bit of fun? >> i think it's fun, but it is a good use of their very powerful brand, and they have a new cmo at the postal service, and i think that this is a reflection of her marketing initiative, to real build on the brand value. >> carney, you're the idea guy, a lot of ideas on what they can do to improve profitability. give us a couple of them here. >> number one, let's get rid of postal deliveries, not just on saturdays, but every other day. actually the only day i check my mail is saturday. who has time you? get home in the evening, want to cook dinner, visit with your family, hang out with your friends. mail during the week is a waste of time. let's have it delivered on saturday. >> plus, you want to make it free. >> right? >> i do think that not all mail. remember, business mail, junk mail, that -- you should charge for, but if i want to send manned' thank-you card, i think that should be free. that would help build the brand
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into something people like. >> i personally never check my mail. get someone else to do it because i hate getting bills. i get down every time i get a bill. >> a lot of people don't want their mail. everyone wants it electronically. most of what you get is junk. why not confine it to one day of a week. >> back to the fashion idea, does this have to be tongue in cheek? i would buy something that said newman, but i'm not sure that i would buy like something for real. >> a big ironic market for this stuff. you can see kids hanging out in bars in brooklyn with postal service hats, postal service jackets, maybe even the shorts in the summertime. >> john crawlan, you have your vision 2020 initiative and tell us what that would do to return profitability to the usps. >> the initiative is really about reenvinetying the entire postal ecosystem in america for the future. it's reflecting what we're just hearing, that certainly younger people don't find much use in
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mail. we're trying to understand that. it's all about a discussion to address where mail and communications and parcel delivery is going and bringing everybody to the table to help reinvent what we need in the way of a new postal system. >> where would you take the knife to first, john callan? >> excuse me. >> what would you cut back on to try and get this house in order? >> well, i think postmaster general pat donahue has a good plan. he is the ceo, and he has named a number of areas to cut, quite a lot. clearly the workforce needs to be reduced, and he's -- he's working on that through attrition and, you know, buyouts, so to speak. that's 80% of the cost is in labor. >> but it's even more than that. you're talking about, as you said, reinventing the business model for the postal service. >> yes. >> so give us just a slight peek at what you think that should look like to try and make this a viable entity again. >> well, i think it should be
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routes -- right sized meaning you've got to cut it back drastically. al asset is in the delivery system, and that can be continued to be supported, even the other carriers are using it quite a bit, and -- and they should begin to move towards digital applications. they have been pretty slow to do that but are not looking at that, things like hybrid mail where you create an electronic message, send it to a destination and deliver it and print it. >> is privatizing really out of question? >> i think it's a good idea to privatize this thing. we spend way too much money on the postal service that's blossomed into all sorts of government pensions, but i do think getting into electronic mail is a mistake. look, everybody has a free g-mail account right now. everybody has e-mail accounts that are being pushed on you. microsoft will give you an e-mail account, google an e-mail account. >> too much. >> stay out of electric mail. figure out what your product, is delivery of mail and find out
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how to get people to appreciate more. not all about cutting. maybe make birthday cards free. lure people into liking the post office again. >> maybe send kiss-a-grams. >> or maybe people should have to go by the post office to pick up the mail and then would you go by when you needed it and you would save a lot on that carrier delivery cost. >> oh, yeah. >> john callan, as you know, always smart to listen to your customers what. do the customers say about that especially in the low profitability routes around the country where they have talked about closing post offices in areas that, you know, that's -- some people, that's their only connection to the rest of the world in some cases? >> well, that's a good question. first of all, customers in the eyes of the postal service are the people who do the mailing mostly and pay for it. i think your question is about those of us who receive mail and you're hearing a lot of comment about how we might not necessarily want it. there hasn't been a lot of
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research on that. in fact, one of the things we're trying to address in our conference is bringing consumers, receivers of mail who aren't paying for it in to talk about what to want from the postal service. >> that might be a good way of getting some money. maybe if you do -- if you are the sort of person who really wants the mail six days a week you should pay for that service. maybe the people receiving the mail should be the customers also. >> the airline model, if you want a pillow with that seat. >> your idea of only once a week has a fan on twitter, they only collect the garbage once a week so why not the mail. >> one of the people i was e-mailing with today so a lot of your mail could just be delivered directly to the trash collector and save everybody the time. >> there you are. >> thank you both, john and job. good to see you. >> thanks. >> is the federal reserve digging itself into an even deeper hole? that question on the former fed
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forget washington's fiscal woes. our next guest says that there's a new risk to the country's economic health, and it all has to do with the fed's balance sheet and the low rate policy it's had for a number of years now >> indeed. he's columbia university's rich mishkin. >> welcome back. >> lots of focus today on the fed minutes that came out earlier on today. what was your read on the fed? i mean, the market is taking them as hawkish. is that the correct way to read it? >> i think that there's some concerns that have been raised in both the minutes and actually we've seen in recent speeches which are a little bit more hawkish. there are two issues that are coming up which is that there is a concern by some members of the committee, particularly we saw jeremy stein make a speech and others have raised this issue and others have done it. there's a potential issue of having very low interest rates lead to excessive risk-taking
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and this is an issue that is the search for yield that when you have very low interest rates you might want to get higher yields and so the way you get them is by taking on more risk so this is actually a concern that the central bank now has to worry about which is whether you start to get into an upward credit cycle referred to as a leverage cycle where people start taking on too much credit, the credit terms weaken and we get excessive risk-taking which can lead to a lot of tiers in the aftermath that we saw in the crisis, and that concern is becoming a little bit more recognized by members of the fomc. >> and i sense that that's what we saw in the minutes today, that they are starting to at least talk about the risks that are inherent in keeping rates this low for this long. do you think -- here's one of the fears that the market has right now, that the fed may have to start pulling back on queasy on the liquidity and maybe may even have to start raising rates before they hit their jobsium
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that they targeted right now. do you think this is a possibility? >> there's an issue of cost and benefits and a second issue that clearly came up in the minutes which is concern about the size of the federal reserve balance sheet and the fact that it's been purchasing a lot of long-term security exposing the balance sheets to potential losses as a result of federal interest rates going up, and that concern has also been raised. that, again, is another reason why you might start to think that the federal reserve officials are worried about higher costs to these asset purchase programs. >> do you think they will start raising rates before the economy can accept that, ready for it? >> not clear. i think it's a cost benefit analysis. it really depends a lot on where the economy is, so one of the things that's extremely important right now is that we're still having inflation which is below the federal reserve's target of 2%, and that's extremely important and the economy still is, although it's growing, not too bad.
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we still have very high unemployment and very vlodrop in unemployment. that's on the side of why we need more expansionary policy. these other concerns are ones that are just starting to be raised. it's not clear to me that there's a problem yet in terms of credit getting excessively ebullient. >> right. >> but it's a concern now starting to be raised. for example, if -- if these concerns were not there, there was much more of a case to consider its asset purchase program past the end of 2013, but these concerns are ones that are making it more likely that the fed is certainly not going to go past this date, an even if these issues might come up sooner so the fed may not pursue this quite as vigorously as they otherwise would. >> the earlier minutes rattled the markets at the beginning of the year that they might have to pull back from the punch bowl by the end of this year. is there anything you would see out there in the economy that would potentially warrant that? >> i don't think it's there yet,
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but one of the changes, it's very important inters of the way the central bank works now is that central banks really need to and are getting concerned about this credit cycle, so before the crisis people didn't worry about this very much and said they could clean up afterwards if there's a problem. of course we learned that this is was a mistake, the upward credit boom was just disastrous for the world economy and the u.s. economy, so central bankers can no longer be complacent on this. part of the -- you know, why you're paid the big bucks at a central bank is that you're there to worry, and, in fact, these are concerns that you have to worry about, and, in fact, some of the fed members who are quite influential, jeremy stein is a very top economist, someone who will be influential inside the fomc. when he gets up and raises these issues, you've got to take notice. >> great to have you on the showers, sir. >> my pleasure. >> $6 billion, that is how much new york city comptroller jason
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lew said j.c. penney lost about risk taking and he speaks with us about that later. >> remember this back in 1980, the miracle on ice, the captain of the underdog u.s. olympic hockey team who led that amateur squad to the 1980 gold medal is selling a piece of that miracle. wait until you hear what that might sell for. stick with us. details are just ahead. [ male announcer ] any technology not moving forward is moving backward. [ engine turns over, tires squeal ] and you'll find advanced safety technology like an available heads-up display on the 2013 lexus gs. there's no going back. stop! stop! stop! come back here! humans -- we are beautifully imperfect creatures living in an imperfect world. that's why liberty mutual insurance has your back with great ideas like our optional better car replacement.
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a group of disgruntled jpmorgan chase shareholders are stirring the point, calling for the bank to adopt a proposal that would strip jamie dimon of his role of bank chairman. kayla tausche has this story for us. kayla, it's kind of interesting. >> reporter: it is, mandy. over the past few years there's been a growing shareholder movement to oust jamie dimon from his chairman role. this year a group representing some $820 million in jpmorgan shares and includes connecticut and new york pensions are leading the charge, similar to that of goldman sachs last year resulted in the bank appointing a lead director for the first time in its history, separate from then chairman and ceo lloyd blankfein. jpmorgan already has a lead director and they say there's a clear conflict of interest when a board overseeing a ceo is chaired by that ceo.
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shares are down on that news and analysts say it's hard to say that would unlock such a shareholder since they just reached report profits and a 52-week high. >> joining us here at the exchange today in a first on cnbc interview we welcoack new york city comb troller john lew. welcome back. >> good to see you. >> you said when you sat down. >> i'm not really disgrunt sglld but you are concerned that there should be a separation between chairman and ceo. what would that achieve? >> first of all, let's remember there was a $6 billion loss, by far the record kind of loss that we would not want to see a repeat of. >> and i think jamie would agree with you on that. >> i think he would, too. it's a very common sense move. the fact is you have a board of directors that is responsible for hiring and firing the chief executive officer, and why would you then have the chief executive officer, that person
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that the board hires or fires, be in charge of that board? it's just a clear conflict of interest that should be avoided for better corporate governance to unlock the long-term value of any company. >> jamie dimon is widely perceived to be the best banker on wall street today. he's one of the most respected, if not the most respected. are you saying that he's lost a step her, saying he's not a good manager? >> bill -- >> i'm just asking. >> he's a rock star in the investment world. i've met with him on occasion. he's very pleasant. he's a smart guy, but if a $6 billion loss could occur even under the watch of the likes of a jamie dimon. >> right. >> we've got a clear corporate governance problem that we think can be fixed, and it can be fixed by, again, just having somebody other than the person that the board is responsible for overseeing that board. it's very simple, and this is
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nothing personal against jamie, not specific to jpmorgan chase though we are leading the charge on it this year. this is a proposal that gained 44% acceptance among the shareholders. we were part of this, and this year we want to take a more active role. >> since it's not personal. wouldn't you want to see this kind of structure in all companies you invest in then? >> that is the policy that we as new york city pensioners and shareholders undertake, that we support these kinds of policies at any company that we don't think that the chairman of the board and the chief executive officer should be one in the same person. it's a cheer conflict of interest. >> have you spoken to anybody at jpmorgan chase about this? >> we had earlier -- i should say late last year been in touch with the management, and we -- we had kind of helped that on our shareholder resolution. >> you're the new york city comptroller. you can pick up the phone and have the direct dial to jamie dimon, i'm sure. have you had that conversation? >> they weren't interesting in
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entertaining the proposal so we have to go the shareholder route at the annual board meeting. >> jumping in here mandy drury from the mother ship. if i were the shareholder in swr pm, what would a potential split like that mean for me? would it actually benefit me? >> we believe so. we believe that stronger corporate governance is best for the long-term share value, and it could -- it could possibly prevent a kind of loss like what we saw with the london whale. $6 billion is a lot. even at the beginning of it, when it first came to light, the -- jamie in this case characterize it had as a $2 billion loss and originally called it a teachest in a teapot. obviously there are -- there are different objectives that management and investors have. the board represents investors. those interests are not always aligned with management which is why, again, it should not be the same person overseeing the board
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that oversees the chief executive. >> i'm curious. do you feel that separating that position would have prevented a london whale? >> we think it would be clear alliance of accountability. it would have better aligned the investors' interests against the management interests, and quite possibly could have prevented the kind of situation or circumstances that led to that kind of role. >> did i hear you say that maybe in some cases when something like that happens the chief executive being held accountable should be let go? are you saying jamie dimon should have been fired for london whale? >> i didn't say that. that is a decision that the board of directors should make about the chief executive officer. much more difficult for the board of directors to make that rational decision if that chief executive officer actually runs the board. >> john liu, good to see you. this will be coming up for vote i guess at some point, if you can get this on the ballot.
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>> we certainly are going to try. >> john liu, new york city co comptroller joining us here on the new york stock exchange. >> this is the moment video gamers around the world have been waiting for. sony expected to unveil its first new game console since 2006 about an hour from now. we'll preview what's in the offing when we come back. [ male announcer ] this is not my home. there. i said it. they don't have pictures of my kids. they don't have my yoga mat. and still, i feel at home. could it be the flat screen tv? the not so mini fridge? ♪ the different free dinner almost every weeknight? or maybe, it's all of the above. and all the rest. am i home? nope. but it almost feels that way. homewood suites by hilton.
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just nine days, i repeat, nine days until automatic spending cuts kick in unless lawmakers in washington figure out a way to avoid them. if they don't, what will that do to the housing market? well, diana olick breaks it down for us. diana? >> reporter: well, that's right, mandy, look. job losses hurt housing, that's a given, but sequestration could hit housing on several fronts. first, the fha. it could mean a problem in only but refis and the thousands of foreclosed properties that the fha has on its books. 23% of loans originated in 2012
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were fha-backed. but sequestration could also effect all current loans in process. because whether it's a loan to refinance orb buy a home, lenders will call a day or two before a closing to verify that an individual is employed. if that individual is not employed, even if it's a temporary furlough, that mortgage application is then denied and they lose that interest rate lock just as interest rates are beginning to ruse again. then you have cuts to foreclosure counseling programs. 75,000 households, according to hud, would not get the counseling that they would normally receive from hud for foreclosures. and for buying new homes. and that could hurt them, as well. finally, the home builders. those with the big foot front here in d.c., like toll brothers, nvr, they could be hit. stocks of the big builders have been sliding and as analysts downgrade the sector, they saw a big runup last year before the recovery really took off again, we are heading into the spring housing market and this is not what this still fragile recovery
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needs. for more, we've got it on the realty check.cnbc.com. bill? >> diana, thank you. as we mentioned, sony is expected to unveil the playstation 4 in an hour. what is the ps-4 mean for tony, its rivals and for what's been a struggling industry? julia has that story. julia? >> reporter: bill, the pressure is on, for sony to get a head start on microsoft's next generation xbox. we expect the new playstation to address gamer's shift to mobile and social games by focusing on the second screen, with the ability to use the ps vita, tablets or smart phones as control earls. and we expect the new console to stream games over the web. and building on the ps-3's effort to become the entertainment hub of the living room, content is sure to be front and center. the big question is whether the playstation 4 can usher in a next generation of gaming,
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especially considering that nintendo has warned that its wii would not sell as many con somes as expected. and we'll see if it can lure consumers before microsoft's long-awaited console. now, since the last generation of consoles was introduced, consumers have shifted their time and spending to cheap or free mobile games, so, bill, we'll have to see if this can turn the tide. >> this will be very interesting to see. julia, thank you very much. so, i know what you're asking, what could push the dow to new highs first thing tomorrow morning? our panel of top money pros will weigh in, when we come back. plus, the hockey jersey that could fetch $1 million on the auction block. we're back right after this. today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do?
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you could own a piece of sports history for real. the legendary captain of america's 1980 gold medal winning olympic hockey team is putting his gear on the market. but listen to this. there's some concerns over who might buy it. robert frank explains in today's million dollar minute.
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>> he shoots -- he scores! >> it's one of the most memorable moments in sports history. immortalized in the disney film "miracle." >> nobody thought we were going to win. >> but the americans pulled off the greatest upset in the history of international hockey. beating the soviets at the 1980 olympics, ultimately taking home the gold. usa's team captain, mike eruzione. >> when you put a jersey on that says usa across the front, nothing better than that. >> 22 pieces from his gear are hitting the auction block, including his hockey stick, gloves and the jersey he wore in the miracle on ice game. it alone could fetch more than $1 million, which has some worried that america's proudest sports moment might be snatched up by a russian or, worse, a rich soviet hockey player. >> i think one of our americans will outbid the soviet players. the most important thing is it is displayed in the right way and the person or people who buy
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it enjoy it. >> for cnbc, i'm robert frank. >> well, earnings, jobless claims and maybe see a rebound in the market or a continuation of the correction that we saw in the last hour of trade today? lots of things to watch out for for our panel. let's get 30 seconds on the clock, find out what you need to know ahead of tomorrow's trading session. we have quint tetro, craig hodges and kirsten francis. quint, i'm sorry, normally, it's ladies first on cnbc, but what's on your radar? >> thank you, mandy. we don't see much of a surprise in jobless claims. we will be watching the housing numbers, existing home sales tomorrow. we think they're going to be soft. and we think they're going to further stymie this belief that housing is in this full-blown recovery. we don't see it. we think that's a false sense of security, a dead cap bounce, if you will. we're looking for more selling, we've been advising clients to sell into this rally. i think the

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